The OECD (Organisation for Economic Co-operation and Development)composite leading indicators (CLI) for India continue to show a slowdown. CLI for China, however, show regained growth momentum, while showing expansion for the OECD countries.
Also see | OECD Composite Leading Indicators (PDF)
The provisional turning point for the India CLI is in January and turning points in CLI tend to precede the turning points in economic activity by approximately six months. So if the CLI is correct, the economic slowdown in India should start from around July this year. However, the turning point in January is provisional, which means it could be reversed. Also note that, quite unlike the purchasing managers’ indices, CLIs for both the OECD area and China show growth; although again the CLI turning point for China is provisional.
Nevertheless, if the CLI for China is correct and is a signal of an upturn in growth, then commodity prices will be well-supported. But with the Chinese authorities saying that they are keen to slow the economy, it remains to be seen whether the CLI for the country is accurate.
Graphic by Sandeep Bhatnagar/Mint
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